Your thoughts on my low pricing model - $0.64 per seat/month

Hi Dudley,

Congrats on the launch.

I have a few thoughts on this but - obviously - you'll know your business and customers best.

There are two things to look at here...

• price (how much money you charge)
• pricing and packaging (how you charge, eg different tiers, per month, per user etc)

Let's look at your price first.

In my Sales For Founders course, I have a simple rule of thumb for setting your initial price.

Your price (== amount of money you receive from customer in first 6 months) should be...

• ... more than the cost of acquiring, supporting and serving the product to that customer over the first 6 months
• ... less than ~50% of the value your customer estimates they derive from using your product in the first 6 months

That should (hopefully) give you a nice range to work with.

For your current price, I obviously can't speak to the value (upper bound of the price). I don't know your customers or their pains.

But I can say very confidently that acquiring, serving and supporting those customers (in the range you described) is going to cost you more than you charge them.

So you'll almost certainly need to charge more to get anywhere close to profitability mid- to long-term. Probably 5-10x more.

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As for pricing, you should read @patio11's excellent guide on pricing here.

Some things that immediately stand out to me...

• Value and pricing should be aligned where possible. This doesn't seem to be directly the case for you
• Annual leave doesn't intuitively seem to be the kind of thing you'd pay monthly for (just my assumption)
• Employees do leave and arrive. At this low price, it's a real pain to keep adding/deleting users/employees for your customers. A flat fee (or range) would probably be more warmly welcomed

Good luck and feel free to ask q's or shoot me an email for follow ups :)

Is there any profit in that? It seems so low!

Also, when charging small amounts you can end up being hounded by scam/fraudsters, I believe.

I'm in a similar situation with my app. You probably thought of this, but it could help to charge yearly to reduce the overhead costs. Most businesses would probably prefer it over monthly tiny amounts.